Best Practices in ERP Systems Optimization

Continuous Testing For Continuous Improvement

In the Internet Age, everything is expected to be available in an instant, to be there on-demand in real-time. Unfortunately, large projects such as ERP optimizations can not be successful if they are rushed. Nonetheless, short-cuts and skipped testing phases are tempting strategies to reduce job pressures to deliver a finished optimization faster.

Don’t succumb to those pressures. Why? Because one of the most common reasons CIOs and technologists lose their jobs today is because of failed IT or ERP projects. One of the most common reasons ERP projects fail is because testing was not thorough or not completed which allowed bugs to grow and burrow deep into the system. This makes it difficult to find the bugs later and far more expensive to fix.

It is critical to identify underperforming areas after measuring the post go-live performance. Conduct a root cause analysis and implement corrective action as fast as possible. However, be sure to prepare everyone in advance that all expected benefits will not be achieved in a single try, and indeed, may not be achieved until several optimization efforts down the road.

Leverage ERP in the Cloud

It is important to realize that even if you select an ERP system that is strictly on-premise, the system will likely have to incorporate or integrate with applications that are in the Cloud -- if not immediately then certainly very soon. For this reason, and others, cloud ERP is increasing in popularity.

"ERP in the cloud is a reality" agrees Amit Sen, director and practice leader, Patni Americas’ Business Consulting Services group. "The focus will be on private clouds, and companies will see significant changes in the cost structure and accounting treatment within their organizations."

Sen says moving ERP to the cloud will have the following impacts:

The CIO will focus on delivering the value of ERP to the business and not managing the application

There will be an increased focus on application utilization

It will move IT closer to business by decentralizing some of the business analyst functions

ERP software will take on the role of process steward within the organization, driving much needed business IT alignment.

Bottom line: leveraging the Cloud saves you the expense of purchasing new infrastructure for the project - networks, data storage, and servers since you are in effect, leasing. Usually, the equipment comes preconfigured which can in itself speed the project and save your company additional expense. The more you understand the Cloud, the better you can leverage it in your ERP optimizations.

ERP Software Customization

The old standby advice has always been that if you need to customize go with on-premise ERP software. If you want fast and cheap, go hosted. A lot has changed since that bit of wisdom applied to the ERP landscape.

Cloud ERP continues to storm big business adoption, in part because the software is easily customizable without impacting vendor upgrades. More often than not, the cloud ERP software uses a Platform as a Service (PaaS) toolkit which creates the software customization using layers of abstraction. That is, the customization lies between the presentation layer and the database layer. This is a major step forward from the prior client/server era which modified source code in order to perform customization, and thereby gave meaning to the term "fork lift upgrades."

The real gotcha to be on the lookout for is whether your existing software and data can be easily re-deployed to a new environment. And that may be not so much a platform centric question as a licensing question. Be sure you know where you stand on these issues before starting a costly customization that you may not be able to complete.

The first step then in customization, is in assessing what can and cannot be done with the ERP system. Here are the first places you should evaluate before you proceed with a customization effort.

Check the level of difficulty in application decommissioning. Companies can save significantly by decommissioning applications that ERP has made obsolete, useless or repetitive. However, this is rarely as easy as pulling the plug and recycling the server.

See if the system be customized and optimized using web-based tools and standard programming languages - and without modifying the vendors source code. Also, check to see if the vendor will support your customizations and if and when the vendor will set you adrift if you do a lot of customization work. You’ll also need to stay conscious of making so many changes that the code no longer resembles the original software which can create difficulties in supporting the system going forward. Create a journal entry of every optimization you make so you can refer back as necessary to fix bugs or find answers to support questions in the future.

Determine whether customizations survive vendor updates. Better make sure before you proceed. Are customizations managed separately from the core logic? If not, your customizations may break on the next upgrade.

Can you modify all the business logic or just some? Be sure you know the answer to this before you start tinkering and tweaking. This could effect whether you can port to a new release or even to a different product or platform.

Make sure you can easily add subaccounts after the go-live event and even after years of hard use.